A freetrade zone (FTZ) or export processing zone is one or more areas of a country where tariffs and quotas are eliminated and bureaucratic requirements are lowered in order to attract companies by raising the incentives for doing business there.

They are special zones where (some) normal trade barriers such as import or export tariffs do not apply, bureaucracy is typically minimized by outsourcing it to the FTZ operator and corporations setting up in the zone may be given tax breaks as an additional incentive.

The widespread use of freetrade zones by companies such as Nike has received criticism from numerous writers such as Naomi Klein in her No logo book.

The basic argument for freetrade is based on the economic theory of comparative advantage: each region should concentrate on what it can produce most cheaply and efficiently and should exchange its products for those it is less able to produce economically.

In 18th-century Britain, freetrade eventually came to mean the desire for a moderate tariff policy in international trade, especially with France.

The results were new organizations and agreements on international trade such as the General Agreement on Tariffs and Trade (1948), the Benelux Economic Union (1948), the European EconomicCommunity (Common Market, 1957), the European FreeTrade Association (1959), Mercosur (the Southern Cone Common Market, 1991), and the World Trade Organization (1995).

The North American FreeTrade Agreement is a freetrade agreement among Canada, the United States, and Mexico.

This agreement was an expansion of the earlier Canada-U.S. FreeTrade Agreement of 1989.

Unlike other FreeTrade Agreements in the world, NAFTA is more comprehensive in its scope and was complemented by the North American Agreement for Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation(NAALC).

Freetrade supporters argue firstly, that all countries have the right to opt out of the world market through isolationism, and secondly that companies are fictional persons who are taxed without representation, and that the balance of power should shift away from the governments that exploit them.

Freetrade, then, creates an economic incentive for a race to the bottom in regulatory institutions; countries with lax, lenient, non-enforced, or selectively enforced regulatory legal structures will have a competitive advantage in attracting investment to their countries, and not merely in wages.

Critics of freetrade often point to the fall of the Suharto government in Indonesia in the wake of the Asian economic crisis to describe freetrade and its effect on sociopolitical stability.

Freetrade with the developing world provides markets for the poor to sell their goods and earn an income.

International freetrade and competition induce countries and companies to specialize in producing those goods at which they are most effective, that give them the most output for their available inputs.

Those who are truly concerned for the plight of the poor and the environment in the developing world should recognize that economic growth through freetrade is the best remedy for both.

Of the 130 existing trade and investment agreements throughout the world, the United States is party to only two: the North American FreeTrade Agreement (NAFTA) and the Uruguay Round of the General Agreement on Tariffs and Trade.

Many countries would like to sign a freetrade agreement with the United States, but they are hesitant to enter negotiations on agreements that could be subject to countless amendments debated at length in Congress.

Trade promotion authority would assure potential trade partners that the agreements they sign with the Administration will be approved or rejected by Congress quickly and without debilitating amendments.

Unlike the goals of free movement of goods, services and capital, which were directed solely at easing the operation of the Common Market, freedom of movement of persons raises fundamental sovereignty issues connected with citizenship, immigration, terrorism and organised crime.

Although the principle of free movement of services was established early, it took over 15 years before mutual recognition of qualifications was achieved, enabling lawyers, architects, doctors and others to surmount national barriers.

A freetrade area differs from a customs union in that each of the member countries may have its own individual tariffs or other trading arrangements with third party states, whereas in a customs union there is a uniform external trade regime.

The European Commission, being in charge of trade and economic cooperation with the South and Eastern Mediterranean, is responsible for preparing, negotiating and implementing Association Agreements.

As well as bilateral "vertical" trade liberalisation with Europe, the Mediterranean Partners are committed to implement freetrade among themselves ("horizontal" or South-South integration).

The next step is the replacement of the current protocols on rules of origin by the "pan-Euro-Mediterranean" protocol, both in the agreements of the EU with each of the partner countries, and in the agreements between the partner countries.

Free Trade without the WTO (December 1999)(Site not responding. Last check: 2007-10-22)

I too oppose the WTO but for a different reason: I favor freetrade, not only because people should be free to do what they want with their own money but also because freetrade improves people's standard of living.

Freetrade is simply the ability of people to tradefreely with one another.

But again, to the extent that people are free to trade with others, to that extent they are better off.

www.fff.org /comment/ed1299x.asp (775 words)

John Kerry on Free Trade(Site not responding. Last check: 2007-10-22)

You can't have trade be a rush to the bottom, and you can't leave other nations with a one-way street, and you can't abuse people the way it has been.

The mission of the Cato Institute Center for Trade Policy Studies is to increase public understanding of the benefits of freetrade and the costs of protectionism.

Scholars at the Cato Trade Center aim at nothing less than changing the terms of the trade policy debate: away from the current mercantilist preoccupation with trade balances, and toward a recognition that open markets are their own reward.

Unlike in previous trade agreements, the overwhelming majority of Democrats opposed the Central American pact, arguing that the Central American FreeTrade Agreement would cost American jobs.

It has become a lightning rod for tangentially connected issued such as outsourcing of jobs, the economic and environmental effects of globalization, and the legacy of the 1994 North American FreeTrade Agreement, the pact upon which CAFTA is modeled, said Mark Smith of the US Chamber of Commerce, which supports the agreement.

Party leaders told members who are inclined to support freetrade that every vote for CAFTA allows a Republican member to oppose it, according to Democratic House members.

WOLA approaches trade discussions from a human rights perspective, highlighting how core rights such as the right to food, the right to a healthy environment and labor rights will be affected by trade agreements.

The United States government recently negotiated a U.S.-Central American FreeTrade Agreement (CAFTA) and is in the process of negotiating a FreeTrade Area of the Americas (FTAA) and a and a new U.S.-Andean FreeTrade Agreement.

Lessons of the successes and failures of the freetrade model can be drawn from the North American FreeTrade Agreement (NAFTA), which was implemented in 1994 almost ten years ago.

FreeTrade as an ideology or theory has many valuable and powerful points that have attracted countless supporters.

Yet, while Imperial Britain may have claimed to take on freemarket ideology, the freetrade imperialism that it was, was to the detriment of other nations, including America, that suffered under its policies of imperialism abroad, which allowed freetrade to flourish somewhat domestically.

In any case, as recent developments in trade in textile and clothing clearly demonstrate, the value of these offers in practice is much less than what they appear to be because of the tendency and capacity of major industrial countries to restrict exports of developing countries through anti-dumping duties, safeguard measures and ‘voluntary’ export restraints.

Global trading that allows all nations to prosper and develop fairly and equitably is probably what most people would like to see.

While internationalism and equitable global trading allowing fair development is probably what most people would like to see, the current model of corporate-led freetrade and its version of globalization that has resulted, has come under criticism by many, many NGOs, developing nation governments and ordinary citizens.

Blake Hastings is Executive Director for FreeTrade Alliance San Antonio, a non-profit organization dedicated to making San Antonio a center of trade in the Americas.

Hastings is responsible for the staffing and coordination of strategic plan development and trade development initiatives of the Alliance, while serving as a liaison to the institutional members of the Alliance and the community at large.

Marcelo Spatti serves as an intern for the FreeTrade Alliance and specifically helps the Alliance with the preparation of the Brazil Trade Mission scheduled for October 2006.

These issues concern some of the most difficult obstacles to freetrade because they require other countries to dismantle policies that protect their most sensitive industries and most entrenched special interest groups.

As contentious as these issues are, freeingtrade in these areas will stimulate economic growth and bring better jobs and improved living standards to millions of Americans.

And if today’s international trade barriers were reduced by just a third, the average American family of four would enjoy $2,500 per year in additional income, according to a University of Michigan study.

www.heritage.org /Research/TradeandForeignAid/wm838.cfm (849 words)

Free Trade: Political Leaders' views(Site not responding. Last check: 2007-10-22)